Fair Work Commission|2022-08-09

"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) v McCain Foods (Aust) Pty Ltd [2022] FWC 2110 (9 August 2022)

[2022] FWC 2110 [Note: An appeal pursuant to s.604 (C2022/5999) was lodged against this decision.]

s.739 - Dispute resolution

"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU)

Alleged dispute about a matter arising under an enterprise agreement.

[1] The "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) has filed an application under s.739 of the Fair Work Act 2009 (the Act) for the Commission to deal with a dispute relating to a crewing level within the potato products plant operated by McCain Foods (Aust) Pty Ltd (McCain) in Ballarat. The AMWU made the application raising its dispute with McCain pursuant to clause 9 of the McCain Foods (Aust) Pty Ltd Ballarat Production Enterprise Agreement 2019 (2019 Agreement).[1]

[2] The dispute and its early case management was initially before Deputy President Mansini, as she then was. Following reallocation of the dispute to me, an interlocutory application was made by McCain to have the witness statements of thirteen of the fourteen proposed AMWU witnesses struck out on the basis that they were inadmissible and largely irrelevant. I determined not to grant this application, forming the view that once the evidence of the AMWU had been led, it was open to McCain to address me on the question of relevance. Ultimately the AMWU called only three witnesses when I conducted a hearing on each of 30 May 2022, 16 June 2022 and 17 June 2022.

[3] The crewing level that was the subject of the dispute was that for the potato packing area within McCain's potato products plant. This brought into focus Clause 16 in Appendix 1 of the 2019 Agreement, which provides:

16.1 Prior to the commencement of this Agreement, crewing levels have been established to reflect workloads, rosters and business needs. Crewing levels for the Potato Products Plant are as follows

Potato Processing 7 roles
Raw/Frozen Inspection 5 roles
Quality Control 3 roles
Potato Packing 11 roles
Production Put Away 3 roles

16.2 Planned crewing levels may be subject to change due to changes in investment in capability and technology from those in place at the date of commencement of this Agreement. Any such change will be subject to consultation under clause 10 of the Agreement.

16.3 In cases of planned and unplanned absences, all reasonable efforts will be made to cover positions with employees that are available and skilled.

16.4 For the purpose of this clause no single employee shall be expected to fill the positions of two or more employees during a shift. If replacement coverage for an absence is not found within two hours of an absence being notified, a Job Safety Analysis (JSA) will be completed, no later than two and a half hours after the absence has been notified to determine how to manage the operation for the balance of the shift."

[4] There were three questions for arbitration submitted by the AMWU and seven questions submitted by McCain. Having considered them, I ultimately formed the view that the question to be determined is:

"Is the Respondent (McCain) required to allocate 11 crew members per shift to the potato packing area in the potato products plant?"

[5] Neither party objected to me proceeding on this basis.

[6] The principles that apply to the interpretation of an enterprise agreement have been outlined by the Full Bench of the Commission in AMWU v Berri Pty Ltd[2] (Berri), drawing on the earlier Full Bench decision in AMIEU v Golden Cockerel Pty Ltd.[3] The Full Bench in Berri affirmed that the interpretation of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a dispute over the interpretation of an enterprise agreement will turn on the language of the agreement, having regard to its context and purpose. Context might appear from the text of the agreement as a whole, the disputed provision's place and arrangement in the agreement, and the legislative framework under which the agreement was made.[4]

[7] Further, the correct approach was succinctly put by the Full Court of the Federal Court in WorkPac Pty Ltd v Skene[5] as follows:

"[197] The starting point for interpretation of an enterprise agreement is the ordinary meaning of the words, read as a whole and in context. The interpretation "... turns on the language of the particular agreement, understood in the light of its industrial context and purpose ...". The words are not to be interpreted in a vacuum divorced from industrial realities; rather, industrial agreements are made for various industries in the light of the customs and working conditions of each, and they are frequently couched in terms intelligible to the parties but without the careful attention to form and draftsmanship that one expects to find in an Act of Parliament. To similar effect, it has been said that the framers of such documents were likely of a "practical bent of mind" and may well have been more concerned with expressing an intention in a way likely to be understood in the relevant industry rather than with legal niceties and jargon, so that a purposive approach to interpretation is appropriate and a narrow or pedantic approach is misplaced." (citations omitted)

[8] Berri further provides that the first task in construing an enterprise agreement is to determine whether an agreement has a plain meaning or is ambiguous or susceptible of more than one meaning.[6] It is permissible to take into account the historical context in order to assist in determining whether ambiguity exists in the first place.[7]

[9] The essence of the AMWU's position on the interpretation of clause 16 in Appendix 1 of the 2019 Agreement was based on a proposition that:

McCain exercised its rights under clause 16.2 in Appendix 1 of the McCain Foods (Aust) Pty Ltd Ballarat Production Enterprise Agreement 2016 (2016 Agreement);
When negotiating the 2019 Agreement, the AMWU advanced a claim about "set numbers";
What then appears in the final text of the 2019 Agreement, insofar as the potato packing area is concerned, is 11 roles;
This was put up for a vote and was approved by a majority; and

• The Commission has subsequently approved the 2019 Agreement.[8]

[10] The AMWU relies, inter alia, on an email sent by Mr Brian McCain (Director, Global Environment and Resource Efficient Operations) on 27 June 2019[9] to assert that crewing levels were the subject of negotiation ahead of the 2019 Agreement.

[11] The AMWU submits that the ordinary meaning of the words in clause 16 in Appendix 1 of the 2019 Agreement leads to the conclusion that there must be eleven crew members per shift allocated to the potato packing team. It asserts that where clause 16.1 in Appendix 1 provides that workforce levels were set prior to the commencement of "this Agreement", it means prior to the commencement of the 2019 Agreement on 14 October 2019, by virtue of the definition of "Agreement" in clause 3 of the 2019 Agreement. The AMWU submits the question then becomes "did anything happen after 14 October 2019 that would permit the McCain to allocate fewer than eleven staff per shift to the Potato Packing team?" In this regard, the AMWU observes that clause 16.2 in Appendix 1 of the 2019 Agreement provides that while crewing levels may be subject to change due to changes in investment in capability and technology, any such a change is subject to consultation under clause 10 of the 2019 Agreement. The AMWU asserts this did not occur and further, it has not occurred since the commencement of the 2019 Agreement on 14 October 2019. As such, the AMWU's position is that nothing has occurred to displace the obligation outlined in clause 16.1 in Appendix 1 of the 2019 Agreement that there must be eleven crew members allocated to the potato packing area each shift.

[12] McCain says that its approach to the bargaining for the 2019 Agreement was to focus on the AMWU's claims because it wanted to expedite the process.[10] McCain argues that negotiations for the 2019 Agreement never discussed, let alone agreed anything about crewing levels in clause 16 in Appendix 1, including the potato packing area. McCain asserts that it did not raise a claim of updating the clause 16.1 crewing levels because the AMWU did not raise the crewing levels in clause 16.1. [11]

[13] McCain submits it is not required to allocate eleven crew members per shift to the potato packing area in the potato products plant because the number "11" in clause 16.1 in Appendix 1 of the 2019 Agreement had been changed through the operation of clause 16.2 (during the operation of the 2016 Agreement) and therefore no longer applies. Mr McCain expressed the opinion that the crewing levels outlined in clause 16.1 were redundant and gave evidence that McCain did not consider changing them was necessary.[12] In particular, McCain submitted the word "are" in the second sentence of clause 16.1 in Appendix 1 of the 2019 Agreement, "Crewing levels for the Potato Products Plant are as follows...", is redundant (my emphasis).

[14] McCain says it relied upon clause 16.2 in Appendix 1 of the 2016 Agreement to change the planned crew levels outlined in clause 16.1 during the operation of the 2016 Agreement, with the result that the planned crew levels in clause 16.1 no longer reflected the actual (reduced) crewing levels. While McCain acknowledged the text in clause 16.1 in Appendix 1 of the 2019 Agreement continues to state crewing levels in existence prior to this change, it maintains they are not operational. Further, McCain submits it is entitled to rely on the reduced crewing levels because the disputed wording of clause 16 did not change upon the commencement of the 2019 Agreement and there was no agreement between the parties for a change to be made to what had become the crewing levels. McCain argues that clause 16 was not intended to reset upon the commencement of the 2019 Agreement and that it was entitled to continue to operate under the actual (reduced) crewing levels that were the result of the change process undertaken pursuant to clause 16.2 in Appendix 1 while the 2016 Agreement was in operation.

[15] McCain submits that because there is a lack of consistency in the drafting in Appendix 1 of the 2019 Agreement, the only way to interpret the meaning of each use of the word "agreement" in Appendix 1 is to look at the purpose and context of each occasion it is used.

[16] I am satisfied clause 16.1 in Appendix 1 of the 2019 Agreement has a plain meaning. While it sits within Appendix 1, I am not persuaded that the meaning of the words "this Agreement" in clause 16.1 is to be derived from clause 1 in Appendix 1. In this regard, I observe that clause 1 in the Appendix comes under the heading "Title" and not "Definition" and consider that this demonstrates its purpose. Further, the use in clause 1 of the words "This Agreement shall be known as" as opposed to, for example, "This agreement means...", confirms this. My view is fortified by taking into account the historical context and I make particular comment in this regard below at [25].

[17] The parties argued contrasting interpretations for the first sentence of clause 16.1 ("Prior to the commencement of this Agreement, crewing levels have been established to reflect workloads, rosters and business needs" (my emphasis)). The AMWU contends "this Agreement" is a reference to the 2019 Agreement, while McCain submits it means Appendix 1 as it was in the 2016 Agreement. Therefore, the AMWU's position is that the crewing levels were established by virtue of the negotiations for the 2019 Agreement, while McCain submits the crewing levels were established no later than the commencement of the 2016 Agreement on 1 March 2017. Their positions differ but both parties have effectively argued that crewing levels were established prior to 14 October 2019 - the commencement of the 2019 Agreement. I do not accept the McCain argument that the word "are" in the second sentence of clause 16.1 in Appendix 1 of the 2019 Agreement ("Crewing levels for the Potato Products Plant are as follows...") is redundant and has the effect of removing the second sentence from further consideration. The second sentence appears within Appendix 1 of the 2019 Agreement and meaning must be given to it.

[18] I consider that when the first and second sentences of clause 16.1 in Appendix 1 of the 2019 Agreement are read together, their meaning is plain and without ambiguity. In the specific context of this dispute, clause 16.1 outlines that the crewing levels for the potato packing area, and other areas within the potato products plant, were established prior to 14 October 2019 and that in the case of potato packing, the crewing level is 11 roles.

[19] Clause 16.2 in Appendix 1 of the 2019 Agreement also proceeds to use both the term "this Agreement" and the term "the Agreement":

"Planned crewing levels may be subject to change due to changes in investment in capability and technology from those in place at the date of commencement of this Agreement. Any such change will be subject to consultation under clause 10 of the Agreement." (my emphasis)

[20] As far as the term "at the date of commencement this Agreement" in the first sentence of clause 16.2 is concerned, I consider this is also a reference to the 2019 Agreement because clause 16.2 is to be read with clause 16.1. It is clear that the term "the Agreement" in the second sentence of clause 16.2 is a reference to the 2019 Agreement because clause 10 of the 2019 Agreement deals with 'consultation' whereas clause 10 in Appendix 1 of the 2019 Agreement deals with public holidays. Read as a whole and in context, clause 16 sets out crewing levels, provides that they may be changed during the operation of the 2019 Agreement and stipulates that any such change will be subject to the consultation obligations outlined in the 2019 Agreement.

[21] I also observe there is reference to "the Appendix" in clause 17.1 in Appendix 1 of the 2019 Agreement, while clause 17.4 states, "In the event of 17.2, all terms and conditions contained within this Agreement apply" (my emphasis). I consider that reading clause 17 in Appendix 1 of the 2019 Agreement in its entirety makes clear the 2019 Agreement and Appendix 1 of the 2019 Agreement are distinguished and that the reference in clause 17.4 to "this Agreement" is a reference to the 2019 Agreement.

[22] My determination that there is no ambiguity has been assisted by taking into account the historical context.[13] The 2019 Agreement is the successor to a number of agreements that have previously covered McCain's potato products plant in Ballarat. Relevantly, when the McCain Foods (Aust) Pty. Ltd. Ballarat Production Enterprise Agreement 2014 (2014 Agreement)[14] replaced the McCain Foods (Aust) Pty. Ltd. Ballarat Production Enterprise Agreement 2011, it introduced an appendix with the heading, Appendix 1 - 7-day continuous shift arrangement (Appendix 1). Clause 19.2 of the 2014 Agreement appears to have provided the basis for Appendix 1, stating as follows:

Prior to the implementation of any 7-day continuous roster (which may either replace, or run in conjunction with current roster arrangements), the Company shall obtain the agreement of a majority of the employees in the part of the enterprise concerned, for the roster to be implemented."

[23] Appendix 1 in the 2014 Agreement had 15 clauses in total. The text of clause 1 was as follows:

This Agreement shall be known as the McCain Foods Ballarat Production Employees 7-day Continuous Shift Roster Agreement 2014."

[24] Some other features of Appendix 1 in the 2014 Agreement were:

Clause 2.1.1, the text of which was very similar to clause 19.2 in stating, "Prior to the implementation of a 7-day continuous roster, the Company shall obtain the agreement of a majority of the employees in the part of the enterprise concerned, for such a roster to be implemented";

Clause 2.2, which appears to have made reference to clause 32 of the 2014 Agreement by including the text "consistent with Clause 32 of this Agreement" (my emphasis); and

Clauses 8.6 and 11, which seemingly made reference to the 2014 Agreement by using the description "the Enterprise Agreement".

[25] Clause 1 in the Appendix in the 2014 Agreement served to outline the title of the Appendix. There was no use of the term "this Agreement" in the Appendix apart from the reference in clause 2.2 but this was clearly a reference to the 2014 Agreement because the Appendix did not contain thirty two clauses. Relatedly, the 2014 Agreement did not contain the disputed clause 16 dealing with crewing levels.

[26] The McCain Foods (Aust) Pty. Ltd. Ballarat Production Enterprise Agreement 2016 (2016 Agreement)[15] commenced operation on 8 March 2017. The 2016 Agreement included Appendix 1, with the same heading and features highlighted above in [23] and [24]. Appendix 1 also had the following new features:

A 'Note' inserted into clause 7 of Appendix 1 outlining that no shift loading was payable on overtime worked;

Clause 16, which outlined manning levels for various areas within the potato products plant;

Clause 17, which purported to outline the mechanics of the shift profile voting process; and

Clause 18, which dealt with ending the 24/7 default roster.

[27] Within clause 16 of Appendix 1 in the 2016 Agreement both the term "this Agreement" and the term "the Agreement" were used. In the wording of clause 16.2, they were used as follows:

[28] It is clear that the term "the Agreement" in clause 16.2 was a reference to the 2016 Agreement because clause 10 of the 2016 Agreement dealt with 'consultation' whereas clause 10 in Appendix 1 of the 2016 Agreement dealt with public holidays.

[29] As far as the term "this Agreement" in clause 16.2 in Appendix 1 of the 2016 Agreement is concerned, and its further use in both clause 16.1 and clause 17.1.1 in Appendix 1, I consider these were also references to the 2016 Agreement.

[30] My starting point for this conclusion is that clauses 16 and 17 did not exist in Appendix 1 of the 2014 Agreement and it does not appear to be in dispute that the manning levels in clause 16.1 in Appendix 1 of the 2016 Agreement were brought into existence during the operation of the 2014 Agreement and prior to the commencement of the 2016 Agreement. This being the case, "this Agreement" in clause 16.1 and clause 16.2 in Appendix 1 of the 2016 Agreement can only have meant the 2016 Agreement.

[31] Secondly, when the 2014 Agreement (including Appendix 1) commenced operation on 15 January 2015, the 7-day continuous roster was contemplated but had not been implemented. This is illustrated by the terms of clause 19.2 in the 2014 Agreement, which included "Prior to the implementation of any 7-day continuous roster...the Company shall obtain the agreement of a majority of the employees in the part of the enterprise concerned, for the roster to be implemented". Therefore, when the terms of clause 17.1.1 in Appendix 1 of the 2016 Agreement "At commencement of this Agreement, the active shift profile for the Potato Products plant is the 7 day continuous roster as per Appendix 1" (my emphasis) are read, it is clear the 2016 Agreement and Appendix 1 of the 2016 Agreement are distinguished and that "this Agreement" is a reference to the 2016 Agreement.

[32] Thirdly, Appendix 1 of the 2016 Agreement was also referenced by the use of the words "Appendix 1" in the terms of clause 17.1.4 in Appendix 1 of the 2016 Agreement:

"Affected employees will have the option to vote for either the Appendix 1 Potato Products Plant 7-day Continuous Roster or the default roster encompassing the weekend crews as per clause 19.2 and/or 19.3 of the Agreement."[16]

[33] The 2019 Agreement, in addition to including Appendix 1 with the same heading and features highlighted above in [23] and [24],[17] also had the following features which differed from the 2016 Agreement:

Sub-clause 2.2.2 was inserted within clause 2.2;
Changed numbering within clauses 7 and 10-15;
Clause 9.1 was amended such that personal/carer's was to henceforth accrue in accordance with "Clause 16 of the Agreement";
Clause 17 of Appendix 1 in the 2016 Agreement was not included; and
Clause 18 was renumbered and a reference within it to clause 17 of Appendix 1 in the 2016 Agreement was deleted.

[34] Additionally, the wording in clause 16 in the Appendix 1 that appeared in the 2016 Agreement was almost wholly adopted in clause 16 in Appendix 1 of the 2019 Agreement, save that the references to the word "manning" in Appendix 1 of the 2016 Agreement were changed to "crewing" in clause 16 of Appendix 1 in the 2019 Agreement.

[35] It can thus be concluded from this historical context that both "this Agreement" and "the Agreement" in clause 16 in Appendix 1 of the 2019 Agreement were to be references to the 2019 Agreement. There is nothing to suggest that this was not to be the case. It can also be concluded that where the parties intended to change aspects of Appendix 1 for the 2019 Agreement, they did so. In particular, the parties intended to make the changes to clause 16, such that the references to "manning" in the 2016 Agreement became "crewing" in clause 16 in Appendix 1 of the 2019 Agreement, which runs counter to the McCain submissions and evidence that the crewing levels outlined in clause 16 in Appendix 1 of the 2019 Agreement are redundant.

[36] Noting the Full Bench recommendation in Berri for a cautious approach to be adopted to the admission and reliance upon the evidence of the positions advanced during the negotiation process, my view is undisturbed by the documentation that passed between the parties during the negotiations for the 2019 Agreement and the evidence of the various witnesses regarding the negotiations the parties have relied upon. I observe that the Full Bench in Berri suggested that evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.[18] Moreover, I have had regard to the following observations of the Full Bench in Energy Australia Yallourn Pty Ltd v Construction, Forestry, Mining and Energy Union:[19]

"One important aspect of the decision in Berri is its discussion of the nature of enterprise agreements made under the Act, and the fact that, unlike the position that obtained under earlier legislation, there are no 'parties' to enterprise agreements. An enterprise agreement is made not between an employer and a union or other bargaining representative, but by an employer and its employees. Accordingly, principles of interpretation that pertain to intention, objectives, and purpose must take into account the position of employees and their understanding of the proposed agreement leading up to, and in particular immediately prior to, the vote to approve the agreement. Evidence of communications between the employer and employees either during negotiations, or as part of the employer explanation required by s.180(5), may be of more interpretative assistance than evidence of negotiations between employers and bargaining representatives."[20] (references omitted)

[37] At the hearing, I provided the parties with a copy of the Form F17 - Employer's Statutory Declaration and a copy of a document with the title Explanation of Your Enterprise Agreement at McCain Foods, Wendouree, Victoria (Explanation document) from the Commission's file relating to the application made for the approval of the 2019 Agreement.[21] In the latter document, it was outlined:

"Explanation of the Agreement and its Effects on Your Employment

We do not explain every clause in the Agreement here, as the Agreement conditions are almost universally superior to the Award provisions. Doing so would also be extremely complex and would not highlight what is changing for you from the existing arrangements.

In some cases, we have taken the approach below of describing the old (or previous) agreement conditions and then described what is now changing under the new agreement, assuming it is approved by you..."

[38] It is self-evident the Explanation document did not explain every clause in the proposed 2019 Agreement ahead of the vote. Nor did it explain every change. Certainly it made no reference to the crewing levels outlined in clause 16 in Appendix 1 of the 2019 Agreement. As such, I do not consider the Explanation document constitutes evidence tending to establish objective background facts which were known to both parties and which inform the subject matter of the 2019 Agreement.[22]

[39] Having regard to what I have outlined above, I conclude:

The structure and wording of clause 16.1 in Appendix 1 of the 2019 Agreement is not ambiguous;

Further, the wording of clause 16.1 did not operate to change the stated requirement for McCain outlined in clause 16.1 in Appendix 1 of the 2016 Agreement to allocate 11 crew members per shift to the potato packing area in the potato products plant;

To the extent there had been a change in the number of crew members arrived at during 2018, this was not reflected in the wording adopted in clause 16.1 in Appendix 1 of the 2019 Agreement;

While the parties may have turned their minds to changing "manning" to "crewing" in Clause 16, they did not address or amend the details of the crewing levels; and

The Explanation document provided to employees prior to them voting whether to approve the 2019 Agreement did not explain every clause and insofar as it dealt with Appendix 1, it simply stated that the voting arrangements under Appendix 1 and the provisions to terminate the 24/7 default roster profile had been removed because they were no longer necessary.

[40] The task the parties have asked me to discharge is one of interpreting the Agreement they have produced and it is not for the Commission to rewrite the Agreement to achieve what might be regarded as a fair and just outcome.[23] The answer to the question the parties have agreed I should determine in order to resolve the dispute is as follows:

"Is the Respondent (McCain) required to allocate 11 crew members per shift to the potato packing area in the potato products plant?"

N Stojanova of Counsel on behalf of McCain Foods (Aust) Pty Ltd.

[4] [2017] FWCFB 3005 at point 1 in [114].

[6] [2017] FWCFB 3005 at point 7 in [114].

[8] Transcript 17 June 2022 at PN 1668-1669.

[9] Attachment AM 1 to Exhibit A1, DCB at p.34.

[11] Transcript 17 June 2022 at PN 1825.

[12] Exhibit R1 at [28] and [29], DCB at 204.

[13] [2017] FWCFB 3005 at point 8 in [114].

[16] Reference to "Appendix 1" is also made in clause 17.2.3 and clause 17.3.5.1 in Appendix 1 of the 2016 Agreement and reference to "Appendix" is made in clause 18.1 in Appendix 1 of the 2016 Agreement.

[17] Albeit clause 2.2 and clause 11 of Appendix 1 in the 2019 Agreement were renumbered.

[18] [2017] FWCFB 3005 at point 13 in [114].

[22] [2017] FWCFB 3005 at point 11 in [114]

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"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) v McCain Foods

At a glance

Court

Decision date

Source

Judgment (98 paragraphs)

"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) v McCain Foods (Aust) Pty Ltd [2022] FWC 2110 (9 August 2022)

Parties

Legislation Cited (1)